Software firms upbeat amid intensified fight against piracy

The Jakarta Post, Jakarta

Asking Indra Sosrodjojo, a director of local software company Andal, about business last year only elicited a shrug and the comment, "It's not going anywhere."

However, he seemed much happier replying to the same question Monday, "In the future, I see a very significant role for SMEs as market targets. They number around 40 million.

"If we can get 1 percent of this figure, it would give us a huge rise in sales, from around 1,000 currently."

He said he believed the target was realistic as the government had started to seriously counter piracy -- the major constraint facing his business.

"What can you expect from a business if you have to compete with pirated foreign software that only costs Rp 35,000 (US$3.80)," Indra said.

His company sells accounting and financial software worth about Rp 5 million per package.

"I am not afraid of competing with foreign software firms as we have very competitive prices. But it's virtual suicide going up against the pirated ones," he said.

So Indra was among those who are delighted when the Office of the U.S. Trade Representative last week upgraded Indonesia's status from Priority Watch List to Watch List.

"At last, there will be big opportunities for local software houses to finally grow their businesses," he said.

Microsoft Southeast Asia president Chris Atkinson acknowledged that the biggest beneficiaries of reduced piracy were local software firms.

"The reality is, it (piracy) has been a tough factor. But I would say, however tough it has been for us (Microsoft), it has been tougher on local software companies," Atkinson said.

A study released by the Business Software Alliances (BSA) says the losses suffered by the local software industry runs to around US$280 million a year. It also says that software piracy in Indonesia costs the state up to $80 million a year in potential losses due to unrealized taxes.

Citing a study by the International Data Corporation (IDC) -- a research agency -- Atkinson said that if Indonesia could reduce piracy by 10 percent, it would triple the size of the information and communications technology industry, increase the amount of tax collected fivefold, increase the number of jobs in the IT industries thirteenfold, and provide a US$3.4 billion boost to economic growth.

"The IDC also predicts that in a few years to come, if the local climate is good, like what we have today, we could double the number of Independent Software Vendors (ISV) in Indonesia," Atkinson said.

According to Indonesian ISV Association records, there are around 150 ISVs in the country currently.

To help get to that level, Microsoft Indonesia has launched a program called Bina ISV to promote the development of the local software industry by establishing an online market,, to help local software companies develop their businesses.

"Every ISV can put a catalog online, then we market it to corporates across Indonesia. Demand and supply will meet in that market place," Microsoft Indonesia director Irwan Tirtariyadi said. (09)
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